‘Old Tech’ Cams Still Cutting a Dash With Auto Insurers

By Eric Volkman

22nd November 2018

Would you invest $50 or so for a perpetual 15% discount on your auto insurance?

Most of us would unhesitatingly say ‘Yes’. Well, in certain insurance markets around the world you can achieve this with the simple act of buying and installing a dashboard camera, better known as a dashcam, in your vehicle.

Most of us are familiar with dashcams, if not necessarily owners and users. We’ve seen scary/funny footage from these devices, often from the far corners of Europe. Insane accidents, violent road rage encounters and oddball happenings on the road feature prominently in these, which sit on video sharing sites on the internet.

However, dashcams aren’t intended to be hardware that produces entertainment. The true intention behind them, of course, is to record a driver’s journey. In case a crash or other mishap occurs, there will be a record of it taken by the dashcam.

Therefore, says Harish Iyer, personal lines director of the UK arm of insurance multinational AXA: “In certain situations, such as an accident, insurers can use the footage from a dashcam to help resolve a claim.”

“When an accident occurs and there are no human witnesses around, it’s a ‘he said she said’ scenario, even if you are not at fault,” said Murphy Liu, sales manager for BlackboxMyCar.com. “More often than not insurance companies assign partial blame to both parties, so both will end up paying,” Liu added. “At the end of the day, a dashcam is another form of insurance. You don’t really need it until something happens, at which point you’ll be happy that you do have it.”

The company claims to be the number one supplier of dashcams in North America. However, that’s working from a low bar as dashcams have not taken off in that region’s all-important US market. On the global scene, the popularity and prevalence of dashcams is patchy around the world. They’re a common sight inside vehicles in South Korea, England and Russia, for example, but not so much in mainland European nations.

In fact, said AXA’s Iyer: “In certain countries and cities they are illegal or there may be rules in place regarding how you can use the footage, respectively. For example, in Austria and Luxembourg, dashcams are banned altogether, while in Germany it’s illegal to share dashcam footage on social media.”

Luxembourg’s loss is the UK’s gain. In the latter country, it’s common for insurers to provide discounts to policy holders who have installed and use dashcams. These discounts can reach as much as 15%, depending on the insurer. Both AXA and its Swiftcover subsidiary grant discounts up to 10% for this, subject to certain terms and conditions.

Might this kind of savings catch on in the dashcam-light markets, even the ones that currently ban the products? There seem to be some small rumblings in the US, for example. In mid-2016 a pair of New York legislators proposed a bill mandating a straight 5% discount in their state for drivers that installed working dashcams in their vehicles. Despite its age the bill hasn’t been voted on, let alone ratified, which tells us something about the desire for dashcams in that huge market.

Part of this resistance, at least in America, has to do with the legal obligations and constraints auto insurers have to work with. “Insurance is heavily regulated in the US. To offer a discount, insurers need to offer evidence that the technology saves money,” said James Lynch, chief actuary and vice-president of research and education at Insurance Information Institute. “That evidence can be hard to come by. Other countries can offer inducements regardless of whether they drive accident costs lower,” he added.

Lynch pointed out that while dashcams are an obvious boon for establishing liability in a mishap, he hasn’t seen significant evidence that they reduce accidents in, and of, themselves – a common argument espoused by dashcam proponents.

Dashcam discounter AXA has to be considered one of these. “By installing a dashcam, drivers often become more aware of their own driving as well as other road users,” said the insurer’s Iyer. “Being filmed encourages motorists to drive more carefully, as if they are driving recklessly and/or involved in an accident, there will be video evidence against them.”

Most dashcams are fairly inexpensive; even that $50 mentioned at the top of this article can buy you a fairly sophisticated model with added functionalities. This begs a question – in a world where standard in-car technology is advancing by leaps-and-bounds on what seems to be a regular basis, will the humble (and more or less single-purpose) dashcam continue to have a place inside the vehicle?

Possibly not, said Iyer, although the concept of constant video monitoring will remain. “Dashcams that you buy separately and attach to your windscreen may diminish but cameras of some form will be built into vehicles in the future,” he opined. “These will record information on how other road users (autonomous or not) are behaving and feeding this back into the wider system to improve safety and security.”

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